Dive Brief:
- Macy’s said in a company release it is looking to hire an additional 7,000 seasonal associates to staff its stores for the holiday season. The company is mainly staffing to serve customers on its sales floor as well as fulfill in-store pickup items purchased online. Macy’s in September said it planned to hire 80,000 seasonal associates.
- Behind the extra part-time hiring is a strong shopping season at the department store retailer so far, according to the company. Macy’s Chief Stores Officer John Harper said in a statement that "Macy’s has had a great start to this holiday season with high customer volume across our business" and that the search for added associates was "[d]ue to the strong traffic in our stores."
- A Macy’s spokesperson declined to provide additional information on its holiday traffic and performance to date. FBR analysts led by Susan Anderson wrote Nov. 27 that Macy’s was among the leaders in their "bag check" metric, which is just what it sounds like — a survey of retail bags throughout a mall.
Dive Insight:
The retailer's move to bring in extra staff to help with holiday operations comes after a Black Friday weekend that showed in-store traffic falling at department stores as a group.
It also comes amid a sluggish hiring season. In mid-September, early counts pointed to higher seasonal employment, according to Challenger, Gray & Christmas. But the employment firm said in an October release that at the time fewer major retailers had announced large-scale hiring announcements, with employment gains falling 8% compared to the same time last year. Seasonal hiring has fallen each year since 2013, according to the firm.
This holiday season, as Moody’s analysts led by Charles O’Shea pointed out in a Nov. 22 note, will be the first for Macy’s revamped loyalty program, which distributes various perks (such as free shipping and product discounts) according to consumer spending. The analysts note the company is using the new program as "another way to drive their spending" and tap the top 10% of Macy’s customers who account for 50% of its business.
Other observers have dinged Macy’s and its department store peers for their approach to promotions. "We would have liked to see Macy’s being a bit more strategic about their promotions," Ricardo Rubi, partner at consulting firm Simon-Kucher, said in comments emailed to Retail Dive following the Black Friday weekend. "They just revamped their loyalty program, they need to brickwall consumers, it would have been good to see promotions that encourage the sign-up and usage of their new program."
Over the weekend, Macy’s was also beset by technical problems that slowed its purchasing activity. Macy's confirmed that on Black Friday its credit card processing had slowed due to system "over-capacity" problems, an issue that affected stores in Chicago, Washington, D.C., San Diego and other markets, as well as the retailer's website, according to ABC News and other media reports.
The retailer needs a sales boost during the holidays, especially after reporting a 6.1% drop in sales during the third quarter, due in part to the 100 store closures it slated for the year. Same-store sales also fell 4% in Q3, though it’s margins improved slightly, to just under 40% of net sales.
Several analysts see a sluggish turnaround effort at the retailer. Nick Egelanian, president of retail development consultants SiteWorks International, previously told Retail Dive that he saw "no end in sight" for the downward sales trend at Macy’s. "We expect to see more store closures and continuing sales contraction in 2018 and beyond."
GlobalData Retail Managing Director Neil Saunders said in a November note: "While there is no doubt that the company has made progress across some areas, change is far from comprehensive or far-reaching. We get the sense that Macy's fixes issues in a piecemeal way and that it lacks a unified vision for the future of the business."
